The leading cryptocurrency experienced its sharpest fall in months earlier today following rumors that the United States Treasury will charge financial institutions dealing with cryptocurrencies with money laundering.
BTC down by more than 10% in 24 hours
The cryptocurrency market is bleeding following massive losses sustained earlier today. The bearish trend began after Bitcoin lost its $60,000 support earlier this weekend and followed that by dropping from $59,000 to $52,000 in less than an hour.
The massive loss led to the liquidation of positions worth over $10 billion from the market. Other leading cryptocurrencies such as Ethereum, Litecoin, Binance Coin, XRP, and several others all recorded massive losses in the past hour.
According to most analysts, two events caused the massive losses in the market. The first is the rumor from unnamed sources that the United States Treasury will charge unnamed “financial institutions” with crypto-related money laundering.
Although the news isn’t confirmed, it sparked fear in the hearts of several investors and led to the liquidation of billions of dollars worth of positions. Binance sustained the most losses, with nearly $4 billion wiped over the past 24 hours.
No further details were given from the tweet by FXHedge, but it generated a lot of interest from the crypto space as it had more than 6,000 likes and nearly 5,000 retweets.
Xinjiang power failure leads to a massive loss in hash rate
The second reason for the massive decline in Bitcoin’s price is linked to the power failure in China’s Xinjiang province, home to a large number of miners. The power outage began two days ago, and Bitcoin’s hash rate is down by over 40%,
Charles Edwards tweeted about this, saying, “The Bitcoin Hash Rate is down 40% today, as a result of the Xinjiang blackout. One province in China represents a significant share of the Bitcoin network.”
According to Bitcoin on-chain analyst Willy Woo, there is a correlation between Bitcoin’s price and its hash rate. He cited that a similar event happened in 2017, and it affected the cryptocurrency’s price. He tweeted that “Price and hash rate has always been correlated. This is BTC price vs. today’s hash rate collapse (from the Xinjiang blackout).”
Bitcoin’s price has slightly recovered and is trading close to $54,000 at the time of this report. It is unclear if the market will immediately bounce back from this recent loss.